What is the future of the Golf Economy?

[ForeRightAgain]

13 hours ago, Kenny B said:

I can't believe how busy our golf courses are over the past year.  The courses are raking in the money; they have to be.  Our problem is we don't have enough courses IMO.  We have six 18-hole courses open to the public and one private course; we also have three 9-hole courses.  This is the same number of courses that our area had 25 years ago, and our population has doubled since then.  Six 18-hole public courses is not very many for a population center of more than 250K.

We've been driving further away and paying more than usual to secure a 9:30 weekend tee time. Unfortunately the course is closing, even with a full tee sheet most weekends.  This in turn is going to put a crunch on other local public courses.  Thing is we really enjoy playing different courses throughout the year, but we're now thinking about getting a credit line membership at a local club in order to be able to play next year.

[Kansas King]

23 hours ago, sixcat said:

We're a stock/equity club so, membership requires the purchase of one share of stock. Having a noticeable increase in membership applications, accompanied by a stock purchase request isn't normal. The uptick in applicants has been coming from the 18-34 demographic. That is pleasantly surprising to me considering the average age of our membership has been rising for a number of years now. We currently have approximately 375 active, dues paying members. 

I'll be really curious to see how the pandemic affects the endangered equity stock membership model along with private country club type models in general. From what I've seen, private golf clubs are still doing okay but clubs that are still using equity memberships were starting to languish as the older members started passing away and weren't there to make the growing annual assessments. I see a future of more private clubs that have a more golf centric focus instead of offering the "country club" amenities of pools, restaurants/bars, tennis courts, etc. However, it will be interesting to see if the new younger members decide to stick it out and give the old country clubs a shot in the arm. I know the types and success of country clubs is largely dependent on regional and local factors but I'll be curious to see if the surge in golf gives a boost to these clubs. 

[sixcat]

22 minutes ago, Kansas King said:

I'll be really curious to see how the pandemic affects the endangered equity stock membership model along with private country club type models in general. From what I've seen, private golf clubs are still doing okay but clubs that are still using equity memberships were starting to languish as the older members started passing away and weren't there to make the growing annual assessments. I see a future of more private clubs that have a more golf centric focus instead of offering the "country club" amenities of pools, restaurants/bars, tennis courts, etc. However, it will be interesting to see if the new younger members decide to stick it out and give the old country clubs a shot in the arm. I know the types and success of country clubs is largely dependent on regional and local factors but I'll be curious to see if the surge in golf gives a boost to these clubs. 

I have been a member for 16 years. Never had an assessment and my yearly dues have gone up once. That dues increase was $85 annually I think. But we're fortunate and likely not the norm across the industry. Especially, as you correctly point out, for a stock/equity club model.

We have absolutely no debt and an avid membership with a median age of around 54. But that median age isn't likely to decrease anytime soon. I don't foresee the club incurring debt anytime soon either though. We don't have restaurant services, food, beverage, tennis, fitness, etc. to clutter the bottom line. We do golf and nothing more. But we still need to attract some younger members to counterbalance the aging membership. We are doing a pretty good job of that at the moment. Time will tell if that continues to be the case. In my opinion, it will be determined by how successful the region is in keeping young professionals from relocating to more populated areas with more of a nightlife. That's been a growing problem over the past two decades. I fear, it will only increase. 

We do have one thing in our favor. We host a rather large annual Open tournament every August open to professional or amateur entrants. The club makes a considerable profit from this tournament. If my math is correct, the 2021 installment will be the 59th annual. It's an impressive event. 

[release]

6 hours ago, Kansas King said:

I'll be really curious to see how the pandemic affects the endangered equity stock membership model along with private country club type models in general. From what I've seen, private golf clubs are still doing okay but clubs that are still using equity memberships were starting to languish as the older members started passing away and weren't there to make the growing annual assessments. I see a future of more private clubs that have a more golf centric focus instead of offering the "country club" amenities of pools, restaurants/bars, tennis courts, etc. However, it will be interesting to see if the new younger members decide to stick it out and give the old country clubs a shot in the arm. I know the types and success of country clubs is largely dependent on regional and local factors but I'll be curious to see if the surge in golf gives a boost to these clubs. 

Private golf club/country club, whether it's equity ownership or not, all have special assessments.  The price the members pay for having their own play ground.  Club house , fitness room, shower/locker room , dinning facility, plus any other amenities.  Swimming pools/diving pool.  Sauna room/ massage facility , I had even seen one with bowling alleys , tennis courts............ All of the goodies need to be maintained and add improvements over the years.

I know there was a local golf course which hosted the PGA Championship in the past has major exodus of memberships, because of a special assessment of over $80K for improvements. 

Equity membership means ownership, the members will pay for everything that ties with the property.  including lawsuits.  Personally, I stayed away from equity ownership, one has to pay the initiation fee to get in, and a hefty exit fee when selling/leaving the club.  I enjoy playing the public daily fee golf courses ( and some of them are quite nice, just can't pick your company ), the leftover balance from paying the monthly membership due, could mean a few golf trips to dream destination.

 

[Kenny B]